• Washington Trust Bancorp, Inc.
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  • Washington Trust Announces Earnings
    Company Release - 04/23/2007 09:18

    WESTERLY, R.I.--(BUSINESS WIRE)--

    Washington Trust Bancorp, Inc. (NASDAQ Global Market; symbol: WASH), parent company of The Washington Trust Company, today announced first quarter 2007 net income of $6.0 million, or 44 cents per diluted share. Net income for the first quarter of last year totaled $6.1 million, or 44 cents per diluted share. The returns on average equity and average assets for the three months ended March 31, 2007 were 13.66% and 1.00%, respectively, compared to 15.09% and 1.01%, respectively, for the same period in 2006.

    "The first quarter results were solid and were achieved in the face of a difficult banking environment highlighted by unfavorable interest rates and soft consumer and residential loan demand," said John C. Warren, Washington Trust Chairman and Chief Executive Officer.

    Net interest income totaled $14.9 million for the first quarter of 2007, down $545 thousand, or 3.5 percent, from the first quarter a year ago. Included in net interest income in 2007 was an interest recovery of $322 thousand received on a previously charged off loan. The net interest margin for the first quarter of 2007 amounted to 2.81%, down 3 basis points from the first quarter of 2006 and up 7 basis points from the fourth quarter of 2006. Excluding 6 basis points attributable to the 2007 interest recovery, the net interest margin for the first quarter of 2007 was down 9 basis points from the first quarter of 2006 and up 1 basis point from the fourth quarter of 2006.

    Total noninterest income amounted to $11.2 million for the first quarter of 2007, up $1.7 million from the same quarter a year ago. Included in noninterest income were net realized gains on sales of securities of $1.0 million and $59 thousand for the three months ended March 31, 2007 and 2006, respectively. Excluding net realized gains on sales of securities, noninterest income increased $751 thousand, or 8 percent, from the same quarter of 2006. This increase was largely attributable to higher revenues from wealth management services. Wealth management revenues were $6.9 million for the first quarter of 2007, up $430 thousand, or 6.7 percent, from the first quarter of 2006. Wealth management assets under administration totaled $3.806 billion at March 31, 2007, up $111 million, or 3 percent, in the first quarter of 2007 and up $363 million, or 11 percent, from March 31, 2006. This growth was due to business development efforts and financial market appreciation.

    Noninterest expenses amounted to $17.1 million for the first quarter of 2007, up $1.4 million, or 8.9 percent, from the same quarter a year ago. During the first quarter of 2007, the Corporation prepaid $26.5 million in higher cost advances from Federal Home Loan Bank of Boston ("FHLBB"), resulting in a debt prepayment penalty charge, recorded in noninterest expense, of $1.1 million. The source of funds for the paydowns was maturities of investments as well as other borrowings. Excluding debt prepayment penalty expense, noninterest expenses increased $338 thousand, or 2.2 percent, over the same quarter last year.

    Total assets were $2.4 billion at March 31, 2007, essentially unchanged from December 31, 2006. Loan growth was modest in the first quarter. Total loans increased by $10.2 million in the first quarter of 2007, principally due to growth in the commercial loan portfolio. The investment securities portfolio totaled $706.4 million at March 31, 2007, up $2.6 million from December 31, 2006.

    Total deposits increased by $5.6 million from December 31, 2006. Excluding brokered certificates of deposit, in-market deposits were up $18.1 million, or 1.2 percent, in the first quarter of 2007. The Corporation has continued to experience a shift in the mix of deposits away from lower cost demand deposit accounts into higher cost money market accounts and certificates of deposit. FHLBB advances totaled $457.1 million at March 31, 2007, down $17.4 million from December 31, 2006. Other borrowings increased $11.1 million in the first quarter of 2007, mainly due to an increase in securities sold under repurchase agreements.

    Asset quality, as measured by the level of nonperforming assets, remained strong in the first quarter of 2007. Nonperforming assets totaled $3.1 million, or 0.13% of total assets, at March 31, 2007, compared to $2.3 million, or 0.09% of total assets, a year ago. There are no assets acquired through foreclosure on the balance sheet at March 31, 2007. The Corporation has never offered a sub-prime or Alt-A residential mortgage loan program and we have not experienced any recent significant deterioration of asset quality as measured by delinquencies in residential and consumer loans. Total residential mortgage and consumer loan 30-day+ delinquencies amounted to $1.1 million, or 0.12% of these loans, at March 31, 2007, down from $1.4 million, or 0.16% of these loans, at December 31, 2006.

    The allowance for loan losses was $19.4 million, or 1.32% of total loans, at March 31, 2007, compared to $18.9 million, or 1.29% of total loans, at December 31, 2006 and $18.2 million, or 1.29% of total loans, at March 31, 2006. Loan recoveries, net of charge-offs, amounted to $166 thousand and $29 thousand, respectively, for the three months ended March 31, 2007 and 2006, respectively. The Corporation's loan loss provision charged to earnings amounted to $300 thousand for the first quarter of 2007, unchanged from both the fourth quarter of 2006 and the first quarter of 2006.

    Total shareholders' equity amounted to $175.5 million at March 31, 2007, compared to $173.1 million at December 31, 2006. Under the Corporation's Common Stock Repurchase Plan, 61,100 shares were repurchased at a total cost of $1.7 million during the first quarter of 2007. Book value per share as of March 31, 2007 and December 31, 2006 amounted to $13.12 and $12.89, respectively.

    Washington Trust President and Chief Executive Officer John C. Warren, and David V. Devault, Executive Vice President, Secretary, Treasurer, and Chief Financial Officer, will host a conference call on Monday, April 23, 2007 at 4:30 p.m. (Eastern Time) to discuss the Corporation's first quarter results. This call is being webcast by VCall and can be accessed through the Investor Relations section of the Washington Trust website, www.washtrust.com. A replay of the call will be posted in this same location on the website shortly after the conclusion of the call. You may also listen to a replay by dialing (877) 660-6853, and entering Account #: 286 and Conference ID #: 235815. The replay will be available until 11:59 p.m. on April 30, 2007.

    Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank founded in 1800. Washington Trust offers personal banking, business banking and wealth management services through its offices in Rhode Island, Massachusetts and southeastern Connecticut. Washington Trust Bancorp, Inc.'s common stock trades on the NASDAQ Global Market(R) under the symbol WASH. Investor information is available on the Corporation's web site: www.washtrust.com.

    This report contains certain statements that may be considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including statements regarding our strategy, effectiveness of investment programs, evaluations of future interest rate trends and liquidity, expectations as to growth in assets, deposits and results of operations, success of acquisitions, future operations, market position, financial position, and prospects, plans, goals and objectives of management are forward-looking statements. The actual results, performance or achievements of the Corporation could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in general national or regional economic conditions, changes in interest rates, reductions in the market value of wealth management and trust assets under administration, reductions in loan demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan default and charge-off rates, changes in the size and nature of the Corporation's competition, changes in legislation or regulation and accounting principles, policies and guidelines, and changes in the assumptions used in making such forward-looking statements. The Corporation assumes no obligation to update forward-looking statements or update the reasons actual results, performance or achievements could differ materially from those provided in the forward-looking statements, except as required by law.

    Washington Trust Bancorp, Inc. and Subsidiaries
                              FINANCIAL SUMMARY
    
                                                  Three Months Ended
                                             -----------------------------
                                             Mar. 31,  Dec. 31,  Mar. 31,
    (Dollars and shares in thousands, except
     per share amounts)                        2007      2006      2006
                                             --------- --------- ---------
    
    Operating Results
    ----------------------------------------
    Net interest income                       $14,870   $14,976   $15,415
    Provision for loan losses                     300       300       300
    Net gains (1osses) on sales of
     securities                                 1,036       (16)       59
    Other noninterest income                   10,212    10,449     9,461
    Noninterest expenses                       17,109    15,740    15,704
    Income tax expense                          2,734     3,166     2,858
    Net income                                  5,975     6,203     6,073
    
    Per Share
    ----------------------------------------
    Basic earnings                              $0.45     $0.46     $0.45
    Diluted earnings                            $0.44     $0.45     $0.44
    Dividends declared                          $0.20     $0.19     $0.19
    
    Weighted Average Shares Outstanding
    ----------------------------------------
           Basic                             13,412.1  13,452.5  13,386.8
           Diluted                           13,723.0  13,769.3  13,698.6
    
    Key Ratios
    ----------------------------------------
    Return on average assets                     1.00%     1.04%     1.01%
    Return on average equity                    13.66%    14.06%    15.09%
    Interest rate spread (taxable equivalent
     basis)                                      2.46%     2.39%     2.53%
    Net interest margin (taxable equivalent
     basis)                                      2.81%     2.74%     2.84%
    
    Allowance for Loan Losses
    ----------------------------------------
    Balance at beginning of period            $18,894   $18,645   $17,918
    Provision charged to earnings                 300       300       300
    Net recoveries (charge-offs)                  166       (51)       29
                                             --------- --------- ---------
    Balance at end of period                  $19,360   $18,894   $18,247
                                             --------- --------- ---------
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                              FINANCIAL SUMMARY
    
    (Dollars and shares in thousands,
     except per share amounts)          Mar. 31,    Dec. 31,    Mar. 31,
    Period-End Balance Sheet              2007        2006        2006
    ---------------------------------- ----------- ----------- -----------
    Assets                             $2,399,962  $2,399,165  $2,432,765
    Total securities                      706,406     703,851     786,674
    Loans:
           Commercial and other:
             Mortgages                    271,817     282,019     277,851
             Construction and
              development                  33,092      32,233      35,599
             Other                        294,261     273,145     245,376
                                       ----------- ----------- -----------
           Total commercial and other     599,170     587,397     558,826
           Residential real estate:
             Mortgages                    577,823     577,522     573,262
             Homeowner construction        11,742      11,149      18,147
                                       ----------- ----------- -----------
           Total residential real
            estate                        589,565     588,671     591,409
           Consumer:
             Home equity lines            142,548     145,676     157,769
             Home equity loans             94,521      93,947      76,107
             Other                         44,396      44,295      34,671
                                       ----------- ----------- -----------
           Total consumer                 281,465     283,918     268,547
                                       ----------- ----------- -----------
           Total loans                  1,470,200   1,459,986   1,418,782
    Deposits:
           Demand deposits                175,010     186,533     181,345
           NOW accounts                   176,006     175,479     179,027
           Money market accounts          290,273     286,998     227,433
           Savings accounts               204,465     205,998     202,395
           Time deposits                  837,838     822,989     870,420
                                       ----------- ----------- -----------
           Total deposits               1,683,592   1,677,997   1,660,620
    Brokered deposits included in time
     deposits                             163,089     175,618     222,118
    Federal Home Loan Bank advances       457,145     474,561     556,051
    Shareholders' equity                  175,527     173,056     159,880
    
    Capital Ratios
    ----------------------------------
    Tier 1 risk-based capital                9.47%       9.57%       9.26%
    Total risk-based capital                10.84%      10.96%      10.72%
    Tier 1 leverage ratio                    6.14%       6.01%       5.64%
    
    Share Information
    ----------------------------------
    Shares outstanding at end of
     period                              13,382.5    13,429.7    13,412.7
    Book value per share                   $13.12      $12.89      $11.92
    Tangible book value per share           $8.86       $8.61       $7.90
    Market value per share                 $26.81      $27.89      $28.07
    
    Credit Quality
    ----------------------------------
    Nonaccrual loans:
           Commercial:
             Mortgages                     $1,157        $981        $328
             Construction and
              development                       -           -           -
             Other                          1,021         831         705
           Residential real estate            709         721       1,040
           Consumer                           216         190         195
                                       ----------- ----------- -----------
           Total nonaccrual loans          $3,103      $2,723      $2,268
    Other real estate owned, net                -           -           -
    Nonperforming assets to total
     assets                                  0.13%       0.11%       0.09%
    Nonaccrual loans to total loans          0.21%       0.19%       0.16%
    Allowance for loan losses to
     nonaccrual loans                      623.91%     693.87%     804.54%
    Allowance for loan losses to total
     loans                                   1.32%       1.29%       1.29%
    
    Assets Under Administration
    ----------------------------------
    Market value                       $3,806,274  $3,694,813  $3,442,941
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                         CONSOLIDATED BALANCE SHEETS
    
    (Dollars in thousands)                          Mar. 31,    Dec. 31,
                                                      2007        2006
    ---------------------------------------------- ----------- -----------
    Assets:
    Cash and due from banks                           $30,058     $54,337
    Federal funds sold                                 29,625      16,425
    Other short-term investments                          683       1,147
    Mortgage loans held for sale                        2,122       2,148
    Securities:
     Available for sale, at fair value; amortized
      cost $540,650 in 2007 and $525,966 in 2006      541,942     526,396
     Held to maturity, at cost; fair value
      $162,974 in 2007 and $175,369 in 2006           164,464     177,455
    ---------------------------------------------- ----------- -----------
     Total securities                                 706,406     703,851
    Federal Home Loan Bank stock, at cost              28,727      28,727
    Loans:
      Commercial and other                            599,170     587,397
      Residential real estate                         589,565     588,671
      Consumer                                        281,465     283,918
    ---------------------------------------------- ----------- -----------
      Total loans                                   1,470,200   1,459,986
     Less allowance for loan losses                    19,360      18,894
    ---------------------------------------------- ----------- -----------
     Net loans                                      1,450,840   1,441,092
    Premises and equipment, net                        24,603      24,307
    Accrued interest receivable                        11,572      11,268
    Investment in bank-owned life insurance            40,161      39,770
    Goodwill                                           44,558      44,558
    Identifiable intangible assets, net                12,448      12,816
    Other assets                                       18,159      18,719
    ---------------------------------------------- ----------- -----------
     Total assets                                  $2,399,962  $2,399,165
    ---------------------------------------------- ----------- -----------
    
    Liabilities:
    Deposits:
     Demand deposits                                 $175,010    $186,533
     NOW accounts                                     176,006     175,479
     Money market accounts                            290,273     286,998
     Savings accounts                                 204,465     205,998
     Time deposits                                    837,838     822,989
    ---------------------------------------------- ----------- -----------
     Total deposits                                 1,683,592   1,677,997
    Dividends payable                                   2,682       2,556
    Federal Home Loan Bank advances                   457,145     474,561
    Junior subordinated debentures                     22,681      22,681
    Other borrowings                                   25,792      14,684
    Accrued expenses and other liabilities             32,543      33,630
    ---------------------------------------------- ----------- -----------
     Total liabilities                              2,224,435   2,226,109
    ---------------------------------------------- ----------- -----------
    
    Shareholders' Equity:
    Common stock of $.0625 par value; authorized
     30,000,000 shares;
      issued 13,492,110 shares in 2007 and 2006           843         843
    Paid-in capital                                    35,697      35,893
    Retained earnings                                 144,841     141,548
    Accumulated other comprehensive loss               (2,876)     (3,515)
    Treasury stock, at cost; 109,575 shares in
     2007 and 62,432 in 2006                           (2,978)     (1,713)
    ---------------------------------------------- ----------- -----------
     Total shareholders' equity                       175,527     173,056
    ---------------------------------------------- ----------- -----------
     Total liabilities and shareholders' equity    $2,399,962  $2,399,165
    ---------------------------------------------- ----------- -----------
    
    Washington Trust Bancorp, Inc. and Subsidiaries,
                      CONSOLIDATED STATEMENTS OF INCOME
    
    (Dollars and shares in thousands, except per share
     amounts)
    
    Three months ended March 31,                         2007      2006
    -------------------------------------------------- --------- ---------
    Interest income:
     Interest and fees on loans                         $23,934   $21,897
     Interest on securities:
       Taxable                                            7,792     8,412
       Nontaxable                                           668       328
     Dividends on corporate stock and Federal Home
      Loan Bank stock                                       718       677
     Interest on federal funds sold and other short-
      term investments                                      191       115
    -------------------------------------------------- --------- ---------
     Total interest income                               33,303    31,429
    -------------------------------------------------- --------- ---------
    Interest expense:
     Deposits                                            12,977    10,238
     Federal Home Loan Bank advances                      4,968     5,359
     Junior subordinated debentures                         338       338
     Other                                                  150        79
    -------------------------------------------------- --------- ---------
     Total interest expense                              18,433    16,014
    -------------------------------------------------- --------- ---------
    Net interest income                                  14,870    15,415
    Provision for loan losses                               300       300
    -------------------------------------------------- --------- ---------
    Net interest income after provision for loan
     losses                                              14,570    15,115
    -------------------------------------------------- --------- ---------
    Noninterest income:
     Wealth management services:
       Trust and investment advisory fees                 5,038     4,627
       Mutual fund fees                                   1,262     1,130
       Financial planning, commissions and other
        service fees                                        570       683
    -------------------------------------------------- --------- ---------
         Wealth management services                       6,870     6,440
     Service charges on deposit accounts                  1,125     1,119
     Merchant processing fees                             1,204     1,047
     Income from bank-owned life insurance                  391       279
     Net gains on loan sales and commissions on loans
      originated for others                                 264       276
     Net realized gains on sales of securities            1,036        59
     Other income                                           358       300
    -------------------------------------------------- --------- ---------
     Total noninterest income                            11,248     9,520
    -------------------------------------------------- --------- ---------
    Noninterest expense:
     Salaries and employee benefits                       9,812     9,619
     Net occupancy                                        1,017       954
     Equipment                                              832       799
     Merchant processing costs                            1,019       887
     Outsourced services                                    519       518
     Advertising and promotion                              429       437
     Legal, audit and professional fees                     450       376
     Amortization of intangibles                            368       405
     Debt prepayment penalties                            1,067         -
     Other                                                1,596     1,709
    -------------------------------------------------- --------- ---------
     Total noninterest expense                           17,109    15,704
    -------------------------------------------------- --------- ---------
    Income before income taxes                            8,709     8,931
    Income tax expense                                    2,734     2,858
    -------------------------------------------------- --------- ---------
     Net income                                          $5,975    $6,073
    -------------------------------------------------- --------- ---------
    
    Weighted average shares outstanding - basic        13,412.1  13,386.8
    Weighted average shares outstanding - diluted      13,723.0  13,698.6
    Per share information:
     Basic earnings per share                             $0.45     $0.45
     Diluted earnings per share                           $0.44     $0.44
     Cash dividends declared per share                    $0.20     $0.19
    
    Washington Trust Bancorp, Inc. and Subsidiaries
                     CONSOLIDATED AVERAGE BALANCE SHEETS
    
    
    
    ----------------------------------------- ----------------------------
    Three months ended March 31,                         2007
                                                Average            Yield/
    (Dollars in thousands)                      Balance   Interest  Rate
    ----------------------------------------- ----------- -------- -------
    Assets:
    Residential real estate loans               $592,059   $7,773   5.32%
    Commercial and other loans                   587,088   11,372   7.86%
    Consumer loans                               281,572    4,825   6.95%
    ----------------------------------------- ----------- -------- -------
     Total loans                               1,460,719   23,970   6.66%
    Federal funds sold and
      other short-term investments                13,494      191   5.75%
    Taxable debt securities                      622,981    7,792   5.07%
    Nontaxable debt securities                    69,648      978   5.69%
    Corporate stocks and FHLBB stock              43,468      800   7.46%
    ----------------------------------------- ----------- -------- -------
     Total securities                            749,591    9,761   5.28%
    ----------------------------------------- ----------- -------- -------
     Total interest-earning assets             2,210,310   33,731   6.19%
    Non interest-earning assets                  171,033
    ----------------------------------------- ----------- -------- -------
     Total assets                             $2,381,343
    ----------------------------------------- ----------- -------- -------
    Liabilities and Shareholders' Equity:
    NOW accounts                                $169,675      $68   0.16%
    Money market accounts                        293,985    2,811   3.88%
    Savings accounts                             205,572      710   1.40%
    Time deposits                                832,492    9,388   4.57%
    FHLBB advances                               467,448    4,968   4.31%
    Junior subordinated debentures                22,681      338   6.04%
    Other                                         12,797      150   4.73%
    ----------------------------------------- ----------- -------- -------
     Total interest-bearing liabilities        2,004,650   18,433   3.73%
    Demand deposits                              170,977
    Other liabilities                             30,719
    Shareholders' equity                         174,997
    ----------------------------------------- ----------- -------- -------
      Total liabilities and shareholders'
       equity                                 $2,381,343
    ----------------------------------------- ----------- -------- -------
     Net interest income (FTE)                            $15,298
    ----------------------------------------- ----------- -------- -------
    Interest rate spread                                            2.46%
    Net interest margin                                             2.81%
    
    
    ----------------------------------------------------------------------
    Three months ended March 31,                          2006
                                                 Average            Yield/
    (Dollars in thousands)                       Balance   Interest  Rate
    ------------------------------------------------------ -------- ------
    Assets:
    Residential real estate loans                $589,837   $7,404   5.09%
    Commercial and other loans                    556,013   10,254   7.48%
    Consumer loans                                267,068    4,289   6.51%
    ------------------------------------------------------ -------- ------
     Total loans                                1,412,918   21,947   6.30%
    Federal funds sold and
      other short-term investments                 10,178      115   4.62%
    Taxable debt securities                       737,563    8,412   4.63%
    Nontaxable debt securities                     35,177      504   5.81%
    Corporate stocks and FHLBB stock               49,344      761   6.26%
    ------------------------------------------------------ -------- ------
     Total securities                             832,262    9,792   4.77%
    ------------------------------------------------------ -------- ------
     Total interest-earning assets              2,245,180   31,739   5.73%
    Non interest-earning assets                   149,361
    ------------------------------------------------------ -------- ------
     Total assets                              $2,394,541
    ------------------------------------------------------ -------- ------
    Liabilities and Shareholders' Equity:
    NOW accounts                                 $170,421      $67   0.16%
    Money market accounts                         228,305    1,607   2.85%
    Savings accounts                              204,768      287   0.57%
    Time deposits                                 851,298    8,277   3.94%
    FHLBB advances                                547,391    5,359   3.97%
    Junior subordinated debentures                 22,681      338   6.04%
    Other                                           7,017       79   4.64%
    ------------------------------------------------------ -------- ------
     Total interest-bearing liabilities         2,031,881   16,014   3.20%
    Demand deposits                               179,954
    Other liabilities                              21,759
    Shareholders' equity                          160,947
    ------------------------------------------------------ -------- ------
      Total liabilities and shareholders'
       equity                                  $2,394,541
    ------------------------------------------------------ -------- ------
     Net interest income (FTE)                             $15,725
    ------------------------------------------------------ -------- ------
    Interest rate spread                                             2.53%
    Net interest margin                                              2.84%
    

    Source: Washington Trust Bancorp, Inc.


    Contact: Washington Trust Bancorp, Inc. Elizabeth B. Eckel, 401-348-1309 Senior Vice President, Marketing ebeckel@washtrust.com